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Evening Capsule: A look back at the financial markets for the day
Publish date: 18th October, 2019
Stock markets are known for their volatility. But it can also be quite an exciting roller-coaster ride. Some find it interesting and enthralling. Others find it worrisome.
Irrespective, if you're a stock market trader or investor, you need to keep yourself up-to-date with stock market developments.
Here’s a summary look at the stock market trends and developments today:
Nifty spurts to 11,662 (+76 points); Sensex also higher at 39,298 (+246 points)
The last day of the week sustained the bullish sentiments. The news rooms were dominated by RIL touching a record market cap of Rs.9 trillion and select PSU stocks like BHEL and MMTC rallying sharply on divestment hopes. The rally on Friday marked the seventh consecutive day of gains and marks one of the longest gaining streaks for the market in recent memory.
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10-year bond yeilds inched higher to 6.510% at 3.30 pm on Friday
Bond yields have been gradually inching higher after the BREXIT deal led to a fall in bond prices. In the Indian context, bond yields have also been gradually inching up on expectations that the fiscal deficit could overspill by nearly 50 bps for the full year. This could be due to the mix of tax sops given and more infrastructure investments expected from the government as a means of boosting growth.
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The rupee strengthened marginally by 3 bps at 71.146/$ at 3.30 pm on Friday
The rupee has been under pressure over the last few days as the dollar has become progressively stronger and the Pound has also been strengthening. However, the consistent inflow of FPI money in the last few days has been positive for the Indian rupee. The rupee did take support after the trade deficit came in sharply lower for the month of September at $10.86 billion.
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Brent crude was nearly 18 bps higher at $60.02/bbl at 3.30 pm on Friday
Crude prices continued their tense battle with the $60/bbl level as contrarian forces were playing on the oil prices. While higher draw downs pulled prices up, the higher inventory levels in the US acted as a resistance for oil prices. Oil prices have been a tad tentative as it digests the full impact of the trade negotiations between the US and China as well as the BREXIT deal just signed.
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Sectoral Viewpoint: Metals, Pharma, Banks boost markets; Media under pressure
The big boost for markets came from RIL touching a market cap of $130 billion and select PSU stocks like BHEL and MMTC spurting on divestment hopes. Overall Metals benefited from global factors after the BREXIT deal. Banks and pharma were also among the gainers. Media was under pressure but that was more due to the predominance of just one stock in the index.
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News that markets reacted to
- Expectations of a major PSU package which would include a mix of revival of PSUs, strategic sale of assets and divestment of minority stake took a lot of PSU banks sharply up. Stocks like BHEL and MMTC were up anywhere between 15% to 20% and that served to keep the market sentiments higher. Friday was also a day when the mid caps and small caps outperformed.
- Gold got back to the $1500/oz mark as a number of macros helped gold benefit from the uncertainty. BREXIT was a big trigger because it opens up a huge array of options between now and October 31st when the UK official walks out of the EU. On the other hand, the weak Chinese data hinting at 6% GDP growth, a historic 27-year low, also helped gold prices to spike.
- China’s GDP growth for the September quarter came in at a 27-year low of 6%. This is lower than the consensus forecast of 6.1% for the quarter. While retail sales were up, slowing investments were a major concern for China. Chinese exports fell and so did it imports, keeping its trade surplus steady. This again raises hopes of a stimulus for the Chinese markets.
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By: Sandhya Kannan, Head – Content
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